This study attempts to assess the efficiency of Hong Kong’s existing public hospital care financing. Time series data on input and output of public hospitals suggest that while output has increased over time, resources provided has increased even more, implying a steady decline in efficiency (even after adjusting for aging population and outpatient provisions). Alternative financing arrangement in the form of private health insurance is then examined. The result indicates that it is not financially infeasible to provide private health insurance to all. Everyone can be a private patient. The separation of financing and provision is recommended as the first step towards this goal.